CONT E NT S
GEMS & PRECIOUS CASE Getting to know more about Corundum Enhancement
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STORY C O V ER
Ruby in Monarchs’ Crowns and Ecclesiastical Liturgical Appliances
Pendant “Bullfinches” by Ilgiz Fazulzyanov – the winner of the International Jewellery Design Excellence Award (IJDE) in Hong Kong www.ilgiz.com
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MARKET VIEW The Development of Artistic Amber Treatment
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DIAMONDS MARKET VIEW Alrosa’s Image Policy: Myth or Reality?
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NEW S Alrosa Sells Polished Diamonds 1ct+ at Auction Alrosa Becomes Auction Winner for Development of Ruchey Gusiny Diamond Deposit 9
COVER STORY
RESEARCH Identification of Synthetic Amethysts
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TOP- LIST Diamond and gems cutters and traders rating 18
TECHNOLOGY
CASE COMPANY Russian Designer – Champion of the Champions !
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Silver Becomes More Fabricable
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DESIGN
MARKET
2011: Any Reasonable Decisions?
TRENDS Graffiti
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Wild World
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Cuff Links
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Chocolate
66
Champagne Bubbles
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N E WS News from Post-Soviet Space Ukraine
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C O M PA N Y Russian Jewelers are Summing Up
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N E WS
CONT E NT S
N E WS
EXPO
Large-Scale Strategy
REPORT
Luxury from France Armenias Jewellery Production Drops by 27.3% 32
R E TAIL What Do They Buy in Russia?
There Is No Crisis in Creative Work
Dialogue between Craftsmanship and Imagination 42
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Retail Chains and Wholesalers 36
C O MP A N Y Festivities on Board Blagodat Frigate
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Royal Tableware
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Vicenza Oro First :Gene Engineering Italian Style
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47th Bangkok Gem & Jewellery Fair
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Hong Kong International Jewellery Show
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DIGEST
Vilnius – Capital of Baltic Jewellery
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The Much Expected Exhibition
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Fair Schedule
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Calm Confidence of SIHH 2011
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Beyond the mind • Your Own Fineness • Over Government’s Head • Amber Shadow on Ural Emeralds 70
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CASE
COVE R ST ORY
Russian Designer – CHAMPION of the CHAMPIONS CHAMPIONS!! Russian designer at first time was named winner of the International Jewellery Design Excellence Award (IJDE) at a gala reception held 4 March in Hong Kong.
PENDANT “Bullfinches”
Chairman of the HKTDC Jewellery Advisory Committee and Chief Judge Lawrence Ma is presenting “Champion of Champions Award” to Ilgiz Fazulzyanov
M
r Fazulzyanov won for his “Bullfinches” pendant design. The design brings the beauty of nature to jewellery. Bullfinches can be found year-round in Russia, and the design pictures them in snow. This year’s IJDE received more than 100 entries from 21 countries and regions. All designers who have won an officially announced jewellery design competition over the past two years were eligible for the award. The judging panel, made up of internationally respected industry experts, weighed innovativeness, craftsmanship, aesthetics, wearability and function in making their decision. The names of designers and originating design competitions of all entries have been excluded from the judging material to ensure fairness during the First Judging. All entries were scored by each judge independently and the top eight designs receiving the highest total scores were chosen as the Finalists to enter the Final Judging held on 3 March 2011. After the winners was announced the competition pieces were on display throughout the show.
*
PENDANT “Cornflower”
EARRINGS “Violets”
The winner of Moscow Jewellery Award Golden Boat 2010 organized by the Jewellery Review magazine, Moscow, Russia
Ilgiz Fazulzyanov was born in Tatarstan in 1968. In 1987, he graduated from Kazan School of Arts. He majored in making stain-glass windows and batik in Japanese and Chinese style. Once, the young designer happened to be in a group of students sent from Tatarstan to Tajikistan for a course of study, to Dushanbe Jewellery Factory. A couple of years later, in 1991, the young designer received an order to manufacture earrings, a bracelet and a ring with a national design on it for the wife of one of o the Tatar Congress participants that took place in Kazan. It was his first serious work. In p pl the th days of the Congress, he managed to make four fo jewellery sets. Afterwards he received an invitation from the Director of the National in Cultural Centre, and shortly he acquired his Cu first fir workshop. In 1994, Ilgiz Fazulzyanov fi presented national handicrafts of Tatarstan p pr at the International Festival of Islamic Countries tri in Pakistan. He exhibited a decorated Koran setting and jewellery articles such as Ko bracelets, earrings and khasite. It was here brr that thh he received his first award. He developed his hi skills with the time, gained more experience; en he broadened the scope of his creative exploration. At present, Ilgiz Fazulzyanov can ex boast bo of participating in multiple exhibitions and festivals where he became winner, first in Moscow of the Golden Boat Moscow Jewellery Award 2010, and then in Hong-Kong.
RING “Poppy”
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CASE
Award
e
Title
COVE C OVER S STT ORY ORY
The competition was organized by the Hong Kong Trade Development Council (HKTDC), the Hong Kong Jewellers’ & Goldsmiths’ Association, the Hong Kong Jewellery & Jade Manufacturers Association, the Hong Kong Jewelry Manufacturers’ Association and the Diamond Federation of Hong Kong, China. Contestants were asked to create designs that break conventional boundaries, while enhancing the charm and glamour of fine jewellery. Prizes included Champion of the Champions Award, Innovative and Uniqueness in Design Award, Craftsmanship Award, Aesthetic Award, Distinction Awards and Merit Awards.
Designer
Champion of Champions
Bullfinches (Pendant)
Ilgiz Fazulzyanov (Russia)
Innovative and Uniqueness in Design Award
Molecular Truth (Bangle)
Kristen MALAN (South Africa)
Aesthetic Award
Up and Down (Ring)
Shuk Mei CHU (Hong Kong)
Craftsmanship
Sensational Orientalism (Necklace & Ring Set)
Eva SHIU (Hong Kong)
Distinction Award
Hanging Moon (Brooch) and Melting Snowball (Ring)
Wen CHAN (Hong Kong)
Distinction Award
Fortune of Eternity (Necklace and Earring)
Regina Da Mei CHENG (Chinese Mainland)
Distinction Award
Listen to the Voice of Liang Zhu (Ear Hanging)
Anne HU (Chinese Mainland)
Merit Award
Sensational Orientalism (Necklace & Ring Set)
Eva SHIU (Hong Kong)
Merit Award
Twin Paisley (Ring)
Seyed Mohammad MORTAZAVI (Iran)
Merit Award
Dancer (Ring)
Lok Chung Angela, NG (Hong Kong)
Merit Award
Precious Limb Bangle (Bangle)
Emily SNADDEN (Australia)
RING “Dancer” Lok Chung Angela
BROOCH “Hanging Moon” Wen CHAN
BANGLE “Molecular Truth” Kristen MALAN
IJDE Award creates a platform to honour creative and eminent jewellery designers from NECKLACE & RING around the world, and provides an opportunity for international jewellery designers to exchange t“Sensational Orientalism” experiences, expertise and craftmanship and to compete for the highest honour – Champion of Eva SHIU the Champions. Supporting Organisations: Jewellery Review Magazine (Russia), Central Association of the th he German G rm Ge man an Goldsmiths, Gol olds dsmith hs Silversmiths and Jewellers, Italian Jewellery Awards, Jewellery Association of Australia, Jewellery Council of South Africa, Korean Jewellery Design Association, National Gemstone Testing Centre, Thai Gem and Jewelry Traders Association.
Winners of the International Jewellery Design Excellence Award 1 / MARCH, 2 0 1 1
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COVE R ST ORY
CASE Already today, the contest panel of the Third International Contest Golden Boat. Moscow Jewellery Award 2011 have marked several works that are worthy to represent Russian jewellery art at IJDE in 2013. This is the Bukvitsa series made by Juvelia and jewellery set “The Turning Point” by Andrey Anisin, Saint Petersburg.
PENDANTS “Bukvitsa” JUVELIA The winner of The Recognition of Petersburg contest The Best Mass Collection Award
SET “The Turning Point” A.Anisin The winner of The Recognition of Petersburg contest Fashion Trends Award
Igor Lobortas Jeweler, a member of the Ukrainian Designers’ Union, Fabergé Order Holder, Contest Panel Chairperson, Golden boat. Moscow Jewellery Award 2011
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“The Turning Point has a good plasticity solution. The designers were not afraid of a technogenic design and breathed life into it thanks to the skilful use of plastic art. Introduction of black and white or cognac coloured and white diamonds into the shape, and their spreading on the surface of the pendant and earrings, as if they were divided into Yin and Yang would emphasise and strengthen the name’s philosophy and would enliven the adornments. Like in the fairy-tale, the turning point: first, besprinkle with ‘dead water’ and then with water of life. Here is a modern Russian fairy-tale super avant-garde image!”
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CASE
Golden Boat. Moscow Jewellery Award 2011 is sponsored by the companies Yakutskiye Brillianty (Kristall Mechty) and Krasnoselsky Yuvelirprom. Thanks to their participation, the project is developing.
Yakutskiye Brillianty (Yakut Diamonds) Jewellery Factory – trade mark Kristall Mechty (Crystal of Dream) Kristall Mechty has been leader of the Russian jewellery market for 16 years already. The company features jewellery that contains Yakutia diamonds. At the end of 2007, Kristall Mechty entered into a partnership agreement with diamond recovery holding Nizhne-Lenskoye, and became the first company in Russia to have the complete production chain — from diamond recovery to jewellery manufacture and sale of finished product through their own chain of stores. This helps develop a wide range of products intended for differ-
ent customers thus pursuing quite a democratic pricing policy. To admirers of luxury, Kristall Mechty offers exclusive works of jewellery art – designer jewellery by high-class masters that combine an up-to-date design and the highest workmanship. Except the excellent Yakutia diamonds, the exclusive jewellery also contains other gemstones with top characteristics: sapphires, emeralds, rubies, tourmalines, etc. The products by Kristall Mechty enjoy popularity with famous Russian politicians, show business figures and actors.
COVE VE R ST ORY
According to Alexey Shcherbina the director of Golden boat. Moscow Jewellery Award and chiefeditor of Jewellery Review and Russian Diamonds & Jewellery magazines, this success the first since 1996, when the necklace “Gizehsky sphinx” by Russian designer Elena Opaleva was included in 28 winners of Diamond International Award (DIA De Beers). “Russian jewellery art today is growing intensively, our designers are really creative and skillful and they easily catch the trends, so that’s enough to succeed. It’s not a secret that many of famous European brands are willingly cooperating with our domestic companies. The winners of Golden boat. Moscow Jewellery Award 2011 organized by our magazine already for the second time are selected from the number of pieces won in various competitions in Russia and CIS-countries for the last year. The Award targets not only to show the works of contemporary Russian designers but also to bring their names to the international scene as they are deserve the world recognition”.
Krasnoselsky Yuvelirprom Krasnoselsky Yuvelirprom is one of the largest Russian jewellery enterprises with a 90 years of history. The masters of Krasnoye-on-theVolga became world famous thanks to their preservation of the ancient craft of filigree. At the end of the 1990s, the factory became a leading production site of Almaz-Holding regaining the second wind: the production became profitable; there appeared an opportunity to develop traditional techniques and represent the country with dignity at international exhibitions. The phenomenon of the decade was the pro-
gramme started in 2001, where they made figurines and filigree compositions. “the Firebird”, “the Troika” and “The Cathedral of Christ the Saviour” were symbols of the leading jewellery compositions in different years. The composition “The Mosque Kul Sharif” was Grand-Prix winner at Jeweler-2005 exhibition. At present, the basis of Krasnoselsky Yuvelirprom’s assortment is gold and silver jewellery with state-of-the-art design containing gemstones, souvenirs and interior decorations, dishes and cutlery. 1 / MARCH, 2 0 1 1
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RUSSIAN RUS R RU USSIA SSIA S ND DIAMONDS IAM AM MO OND NDS & JEWE J WE L L JEW LE ERY
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CO MPAN Y
SILVER Becomes More Fabricable *
T
he suggested addition alloy is made using the direct alloying technique. The purpose of this addition alloy is to increase resistance of the alloy to corrosion and to enhance its fabricability at the same time. The requirements for the content of major alloying elements, amount of loss during melting and casting, versatility of the obtained alloy for all shaping methods was taken into account for the addition alloy calculation. This addition alloy possesses the required brittleness to have good machinability. The influence of the alloy composition and structure on the surface finish can be explained by the fact that the higher is the hardness of metal being machined; the lower is a degree of plastic deformation. The machinability of sterling silver improves when the content of tin is increased up to a certain degree. The alloy obtained on the basis of addition alloy SILVVU-I is fabricable at all stages of jewellery manufacturing process owing to additional content of aluminium, silicon and cupric phosphide of grades MF I, MF II (at P content of 10% and 20%). The best results as a strong deoxidizing and modifying agent and modifier of the second kind were yielded by boron. A good account was given by aluminium thanks to its inherent casting properties. Aluminium, phosphorus, boron and silicon were introduced in the melt as strong deoxidizing agents that suppress emergence of copper oxide. The deoxidising agent effectiveness can be estimated by formation heat of its oxide Ho289 relative to copper formation heat. The developed additional alloy is intended for improvement of fabricability of sterling silver, improvement of its running quality and reduction in volume shrinkage. *
T E CHNOL OGY
Amid the crisis and lessening of demand, the jewellers displayed a growing interest for manufacture of silver adornments. Accordingly, the demand for new technical developments also increased. We would like to bring to your notice an article by Alexander Savchenko on new additional alloy SILV-VU-I developed by him for sterling silver alloys. The application of the suggested alloy and a possibility of obtaining one-piece shaped castings resulted in bringing down the reject rate of castings in gas porosity defects by 4-6%, in misruns and cold shuts by 7-9%. The studies of SrM 925 alloy’s microstructure show that the castings of the normal silver-copper alloy have a coarse-grained structure. After soldering and annealing, there is no increase in size; however, there is some additional oxidation of surface casting zones that results in brittleness. The application of the SILV additional alloy produces the best grain refinement in a casting. The SILV additional alloy produces a grain packing and strengthening effect owing to its elements (nickel, titanium, boron, aluminium) forming an interstitial solution with silver. Therefore, the properties of suggested alloy are almost identical to those of pure silver. Pieces of jewellery made from this alloy have a very beautiful steely colour and shine and do not darken with the time. The alloy’s corrosion stability is increased by aluminium and silicon. Titanium has been selected as an additional centre of crystallization. Boron has been selected as modifying and limiting agent that restricts the growth of crystals and rounds the grains. Erosion resistance is enhanced by adding nickel. This alloy was tested at the West Assaying Inspectorate. The addition alloy was used at Petrodvorets Watch Factory and Mactime factory as well as by L.N. Romanenko, an individual entrepreneur, and other jewellery factories of Kaliningrad showing its versatility and low costs.
The full Russian version of the report can be found at www.j-r.ru
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NEWS
News from Post-Soviet Space UKRAINE
Ukraine’s Jewellery Market: Crisis Marketing
I
n 2010, Kiev Jewellery Factory being the largest Ukrainian manufacturer of mass-produced jewellery not only fully used and developed a chain of fifty company shops all around the country but also sold articles at specialised outlets located in places crowded with potential customers, for example, at public transport stops. This kind of strategy, which seems more suitable to smallscale producers and distributors, is paying off. Unlike the corporate chain, this kind of retail outlets offers customers inexpensive 14ct gold jewellery rather of utilitarian than of decorative character, such as pendant crosses, cufflinks and chains. At these outlets, it is not possible to exchange old gold jewellery or scrap for new one. According to the manager of one of these jewellery outlets, a customer will pay only for the work and shop’s services. Up to 50% of jewellery is being sold through this shop. Many Ukrainian enterprises manufacture jewellery using customer’s own gold. However, the sales of jewellery in exchange for gold will decrease in the next six months because in accordance with the new Ukrainian tax code, such operations will be liable to tax. This facilitated method of selling jewellery is not the only kind of operation that Kiev Jewellery Factory relies on. In 2010, the company’s marketing programme included the support for Sofiyska Brama boutique located right in the heart of Kiev, as this boutique promotes factory’s brand among wealthy Ukrainian public. The major products of this shop are design jewellery with diamonds and coloured gemstones of the first group often manufactured in one copy. In parallel, the company is actively involved in public relations activities indirectly affecting the luxury article market by sponsoring beauty contests in Kiev. The year 2010 can be also characterised by a more active involvement of the Ukrainian jewellery companies in the media space of this country. Many manufacturers not only sponsor all sorts of “talent shows” but often become initiators of media projects. The Kiev supplier of haute joaillerie St. Diamond launched a project called “We are 1 / MARCH, 2 0 1 1
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fifty million” (the population of Ukraine) involving potential partners in it. This project should support young families creating romantic charm around the family and family relations. The jewellery just gains points in this context, and the manufacturing company receives not only good support through public relations but also broadens a circle of possible business partners on the luxury jewellery market (hotels, restaurants, design jewellery and accessories shops.) Sales of jewellery in a “package” with other products and services of luxury class is a new and developing trend on the Ukraine market. In 2010, the producers, including large companies who are rather conservative in their approach towards customers and sales, resorted to e-sales. The largest jewellery
MARKE T
In the third crisis year, many Ukrainian producers worked out a new approach towards the market and changed their strategy; the quiet situation caused by uncertainty was replaced by new initiatives that can be called “crisis marketing.” On the other hand, the year 2011 brought some new laws for Ukrainian jewellers.
In 2010, the Ukrainian Jewellers’ Association marked its 10th anniversary being the largest non-governmental organization of jewellers in the post-Soviet space both in membership (250 members) and in influence it exercises on the jewellery market and on the government agencies. Its basis is formed by Kharkov and Lvov Jewellery Factories, Vinnytsia Krystall Factory, Agat Jewellery Factory, the Lugansk region, Yuvelirservis Kramatorsk, and Ukrzoloto, as well as Agni and Brus (both from Kharkov), Violet, Crimea; Garazd, Pektoral and Almaz-Diamant — all from Kiev. Some government organisations are also members of the Association: the State Assay Office, the Gemmological Centre of the Ukrainian Ministry of Finance, the Ukrainian Academy of Heraldry, Trade Mark and Logotype, etc. The Association’s structure consists of eight regional departments whose managers are members of the Management Committee. The main achievements of the Association are as follows: the abolition of the excise tax, minimising the import duty on jewellery gemstones, preservation of the 10% import duty on finished jewellery products in the event of WTO accession. In 2010, the Association conducted joint work with the Cabinet of Ministers of the Ukraine and took part in discussing the new tax code project. The Ukrainian Jewellers’ Association plays an important role in preparing and holding jewellery shows in Kiev, Kharkov, Lvov and Odessa. A feature peculiar to the Ukrainian jewellery market, unlike the Russian market, is a good coordination in holding jewellery shows. A lot has been done to develop a system of specialised educational institutions in the recent years. The strongest side of the Association’s activity is organising seminars and consultations on current problems of legislation and taxation.
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MARKE T
NEWS manufacturer of diamonds and diamond jewellery in the Ukraine Vinnytsia Krystall Factory converted its website into a sort of an on-line sale outlet. Any registered visitor can have an access to their jewellery catalogue: the average price of jewellery varies at 1,000 Euro. Large distributor companies that represent famous West European brands in the Ukraine do not want to slow down. A mono-brand boutique of the giant of the world luxury industry the Italian House Bulgari opened in 2010 in Kiev testifies to that. The boutique was opened by Noblesse chain of stores, which supplies Swiss-made watches and jewellery from Europe to Russia (predominantly, Italian jewellery brands.) Norm
Amid the crisis, a lot of jewellery shows are being organised in all the biggest Ukrainian cities: Kiev, Odessa, Kharkov, Lvov, Zaporozhye. At present, such exhibitions are normally used as retail sales site. The new tax code and fiscal policy make Ukrainian manufacturers search for an access to foreign markets. Many Ukrainian manufacturers look for their profit outside the Ukraine, in Russia or in Kazakhstan, or try to get an access to the Polish market. Two Ukrainian companies Agat and Agni successfully operate in Moscow; they received a lot of orders at Crocus Jeweler in Moscow and at Golden Ring of Russia in Kostroma from the Russian trading companies owing to the originality of their products.
Tax code adopted 19.11.2010
Final revision of tax code 03.12.2010
Unified Tax
Simplified taxation scheme; practically the entire jewellery trade uses the unified tax.
The operations with jewellery were excluded from the simplified taxation scheme; introduction of a new tax code could adversely affect the entire industry.
The former system is used by individual entrepreneurs with a turnover of up to $65t and not more than ten hired employees, enterprises with a turnover up to $125t and a number of hired workers up to fifty. They do not pay: profit tax and VAT, except for legal entities with a 6% tax rate; individual income tax; land tax, tax on the use of subsoil resources, water and forest resources tax; tax on certain types of entrepreneurial activities.
Profit Tax
Inclusion in the costs of services, consulting, and advertisement purchased from nonresidents.
The tax will gradually be reduced as of 2011, from the current 25% reaching 16% by 2014. Service costs of the enterprises that use the simplified taxation scheme were included in profit.
Remains in force. Inclusion of service costs in profit for simplified taxation scheme users: excludes salary tax evasion; adversely affects small scale business: it will be unprofitable to order services from the enterprises that use the simplified taxation system; part of the the enterprises that use the simplified taxation system will change to the new general system if they do not drop out of the game; it will result in the rise in prices on the services market.
Not permitted
Limitation in allocating such costs to the gross expenditure is up to 4% of proceeds
VAT It will be reimbursed automatically. The VAT rate will be reduced as of 1.01.2014 from to 20% 17%.
Remains in force. Tanks to this the amount of funds borrowed by the government from the business will be reduced; the floating assets will increase, most of all those at the disposal of exporters. If the VAT rate will be reduced by 3%, the goods will fall in price by 1–1.5%
Tax Administration Justification for tax inspections. Unscheduled inspections can be made not oftener than once a year, if an enterprise operates at a loss during four quarters of the year. A tax inspection should be reported ten days before.
Any information can be used for taking an inspection. Inspections can be unexpected, at any moment, in any quantity, and without notification.
A justification for it can be information disclosed pursuant to the law of one’s own free will or as requested by the tax department in accordance with the procedure established by law. A justification containing obscure wording shall be excluded.
Who wants to prove his case in disputable issues associated with accrued taxes.
Taxpayer. However, he will have to pay an amount of tax liabilities accrued by the regulatory body.
Regulatory body. The disputed amount of tax liability will not be paid before the court decision.
Is an order issued by head of regulatory body for taking an inspection mandatory
No. In the event when such an order is issued, the taxpayer is stripped of his right to receive its copy.
The order and submission of its copy to the taxpayer is mandatory.
Administrative arrest of property
Up to 96 hours
Up to 96 hours; however, the tax administration must justify the arrest in court during this time.
Bond for payment of tax
Covers the property that costs double the tax payable
Covers the property, which net book value conforms to the tax payable.
The taxpayer must supply explanations during a tax inspection
Provided for in any case
The taxpayer can refuse to give explanations as regards his family, close relatives or himself.
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NEWS The table that follows gives an idea of the discussions held about the main provisions of the new tax code.
A desire to place all entrepreneurs in equal conditions will be documented in the new law “On Small Businesses”. Ho However, the task to protect the smallsc scale business remains urgent. The Pr President of the Ukrainian Jewellers’ Association Grigory Mazharovsky: “We must help the market entities to pass the transition period without losing their business because more than 70% of jewellery factories operated by the simplified system. If a collapse of trade happens, large and medium-size producers who do not have their own retail store chain may suffer. We consult the members of the Association; advise them what can be done in various situations, or how to compose a work schedule. Many enterprises will have to be reregistered, actually, to start from the beginning. It is not so difficult to have the documents reissued; but what can be done with the employees or with the goods? It is a major problem. The year 2010 was revolutionary for us. Just within three months, the market situation was drastically changed. The licencing for operations with jewellery was abolished, and a new control system was introduced. The association was against the abolition, because the abolition of licencing results in the abolition of the licence conditions such as a mandatory contract with a security agency, availability of premises under the existing regulations, etc. We submitted our revision of amendments, and the authorities examined our suggestions with proper understanding. We succeeded in obtaining for jewellers opportunities to get an indefinite-term licence. The next step would be an indefinite-term licence that could be passed down together with the enterprise. We had never demanded
the abolition of licences licences; we wanted our companies to work in an adequate legal environment to provide the real producers with beneficial conditions for business. We are not sure that we know how to confront pirated goods in new conditions. At present, the share of shady business exceeds 40%. How can we neutralise it? In order to reach the level of European countries, we must reform both the legislation and economy, and the management structure in general. You may well know that any entrepreneur may get registered as a producer having no equipment or operating personnel whatsoever, and bring contraband into the country, having these goods hallmarked as if they were his own products. No-one cares if this producer has production facilities.”
*
The Ukrainian authorities, after the protests made by the business community, gave up the idea of worsening the conditions for small-scale business because it contradicts the Ukrainian constitution. Besides, the new tax code provides for compensation in the reduction of the profit tax and VAT. The final revision of the tax code contains a milder incentive to leave the simplified taxation system, i.e. the inclusion of service costs in profit. The Russian business community does not make any open protest yet against a considerable increase, as of 1 January 2011, in payroll deductions for all enterprises 26% to 34%; for small-scale businesses the deductions will increase by 2.5 times i.e. 14% to 34%. There is no compensation provided like reduction of the tax profit or VAT.
MARKE T
The new tax code that entered into force on 1 January 2011, revoked a lot of opposition from business people as regards the items that could worsen the situation in the small-scale business. Many jewellery production enterprises and almost all jewellery trading companies used to operate by the simplified taxation system and paid the single tax.* In accordance with the new tax code, any activity associated with precious metals, gemstones and jewellery must be conducted under the general taxation system. The provision was excluded from the final edition of this document that concerned the cancellation of the simplified tax in the majority of business activities (including the jewellery production and trade) and transition to the unitary tax system and the mandatory introduction of cash registers. On 3 December, the Ukrainian president V. Yanukovich signed the tax code version approved by the business community representatives and instructed, within two months, to prepare a draft of a special law “On Small-Scale Businesses.”
– There have been serious tax inspections, and some of them were even scandalous, at several well-known companies recently. What can be done not to give cause to such inspections? – More often than not they check cases of tax evasion. Why do people evade taxes? Because they do not keep accounting records. The only correct way to operate the enterprise is to observe the applicable laws. Our Association is always ready to protect its members at all levels in the event of wrong acts on the part of the government. We have our representatives in almost all government agencies from the Cabinet of Ministers to social councils. We have experienced lawyers. All this can work out, if the enterprise functions within the law. If the enterprise evaded taxes and did smuggling, which was discovered by an inspection, why should the Association protect this enterprise? We never protect shady business.
The simplified taxation system was introduced in the Ukraine in 1998. The tax rate varies within $3-$25 per calendar month with an annual turnover of up to $65t. The tax rate shall be set by local authorities and depends on type of activity. The tax and proceeds rates have not been changed since then, and they are not in tune with the realities of the present-day realities any longer.
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RETAIL
MARKE T
Retail Chains and Wholesalers The number of jewellery shops and stores in Russia and the CIS countries accounts for over 20 thousand. Trade experience shows retail nets are most sensitive to consumer demand and market behavior. They can rapidly develop distribution in various regions. Cardinal part of the retail outlets consists of big networks with jewellery shops all over the country. In addition, new regional retail nets sprang up during the last 15 years. Besides, jewellery boutiques selling exclusively premium class and de luxe jewellery are opened in all big cities. The RD&J in every issue traditionally tell to readers about jewellery traders which won an excellent reputation of long-term reliable partners. This time we added to the review the information about wholesale companies which have been operating on the jewellery market for years, acquired partner through the many Russian regions and in foreign countries. JEWELLAND
DRAGOTSENNAYA ORKHIDEYA
Jewelland jewellery holding was founded in 1995. As of now, it possesses its own manufacturing facilities, a well-developed chain of gold wholesale stores and a retail chain consisting of twelve specialised shops in Saint Petersburg. During the years of holding’s operation, its patrons and partners circle
The chain of jewellery shops in the Perm territory consists of six jewellery shops, three of which are located in Perm, two — in Berezniky; and one of them is located in Dobryanka. The shops are situated in the centre of town, actually being multi-brand salons with an area of 75 to 130 m2. Two of them rent some premises of the shopping mall, while the others are isolated shops.
was formed all over Russia. Every year, the geographical range of its deliveries becomes broader and broader. The Jewelland’s range of jewellery articles is extremely wide. The company adheres to the policy of manufacturing exclusive quality articles and of maintaining agreeable prices. Jewelland’s products are made from platinum, gold and silver with natural gemstones and also from their synthetic analogues. The company is rightly considered to be one of the leading professionals of the Russian jewellery sector.
MAGIA ZOLOTA For its seventeen years of operation on the market, Magia Zolota has become one of the largest chains of jewellery shops covering many Russian cities and the CIS countries. Fifty-three company’s shops are located in various Russian cities (Moscow, Saint Petersburg, Astrakhan, Perm, Yekaterinburg, Voronezh, Ufa, Novosibirsk, UstIlimsk, Volgodonsk and Yaroslavl); in Kazakhstan (Almaty); in Belarus (Minsk); in Ukraine (Kiev). As usual, the shops are located in the central streets of the cities, the area of each shop being 15 to 35 square metres
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RUSSIAN DIAMONDS & JEWE L L E R Y
Dragotsennaya Orkhideya offers Russian and Italian jewellery. Its partners are Almaz-Holding, Adamas, Diamant, Platina, Brillianty Kostromy, Master Brilliant, Kakholong, Tulupov Jewellery House, ELLE Jewelry, Intalia, Style Avenu, etc. The company has been operating on the market for fourteen years.
DOM ZLATA Dom Zlata is one of the largest retailers of Ukraine. It was founded in 1991. Its forty-six shops are located in thirty cities of the country and placed in the central parts of town both as isolated points of sale, and in various trading centres. The company collaborates with manufacturers and brands like Yuvelirservis, Smaragd, Yuvelirelit, Ukrzoloto, Akimov, Violet, KUZ, Morion, Vostok, Khrizafi, Tecnigold, Silmar, Breuning, Blumer, Magalini, Fibo and Super Bell. 1 / MARCH, 2 0 1 1
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R E T AIL
KAZAKHYUVELIR
The Ukrainian National Jeweler chain. For today it includes 13 stores in basic cities of Ukraine with a population over 500 thousand persons: Dnepropetrovsk, Kiev, Donetsk, Kharkov, Lugansk. Almaz is a chain of modern multi-brand stores which are located in the central areas of cities with 75% - in shopping malls and 25% - street retail. General area of chain – 2153 m2; average area of the store – 166 m2. Product range includes 40% of diamond jewelry, 25% of brands, 20% of gold jewelry, 10% of silver jewelry and 5% of silverware. Gathering the best collections from leading fashion brands all over the world, Almaz chain has the widest assortment in Ukrainian market. It extends from the wellknown Ukrainian brands: SaGa, Enigmax to world-renowned Spanish, Italian, French, German and Swiss brands as democratic, Braccialini, Cacharel, Calgaro, Cavalery, Celegato, Facco Gioielli, Morgan, Nanis, Nina Ricci, Blu Amante, Chimento, Frank Trautz, Nina Ricci, Rivoir, Marco Bicego, Rosato, Anna Maria Cammilli, Kidou, Rosso Amante, Zancan, Breuning, Furrer Jacot and prestigious jewelry of Faberge, Magerit and Palmiero. Pride of Almaz network is a group of diamond products. The Company has been working on Ukrainian jewelry market for 17 years (since 1994 year).
The largest jewellery commercial enterprise in the territory of the republic of Kazakhstan, which started its business from the four stores and rose to the country’s largest wholesale and retail chain. Over 20 stores located in the largest cities of Kazakhstan form the company’s basis. Variety and affluence of choice of items in the Kazakhyuvelir chain was instrumental in guaranteeing partnership with leading jewellery manufacturers from Russia, Ukraine, Italy, Germany and the USA. The main feature of Kazakhyuvelir assortment is nationally coloured jewelleries, namely rings, earrings, bracelets, pendants with national symbols. The style of the trademark reflecting the culture of the Kazakh people is always recognizable. Due to its reputation, the company maintains fruitful cooperation with many large commercial organizations and banks, including making souvenirs, medals, watches, sleeve-buttons, pens and badges with national symbols.
AZAMAT-ZOLOTO The store chain from Astana (Kakhstan), Azamat-Zoloto is a part of the large diversified holding Oh, Azamat. Its stores offer the best jewellery produced by a number of Russian and Ukrainian leading manufacturers such as Almaz-Holding, Topaz, Lukas, Yakutskie brillianty, Sadko, Platina. As a result of search for new opportunities and its own marketing strategy, Azamat-Zoloto now holds a chain of eight jewellery stores in large shopping molls in Astana (6), branches in Kokshetau (1) and Stepnogorsk (1). Interiors of “AzamatZoloto” showrooms are stylishly decorated in the unique manner: large shopping space, soft lighting, comfortable and up to date showcases, an atmosphere favoring for customers. Annual increase of the company’s turnover is the key evidence of Azamat-Zoloto growth. The company has been operating on the market for seven years. 1 / MARCH, 2 0 1 1
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MARKE T
ALMAZ
LINO The company has been operating on the market for twelve years. The main area of its activity is premium class diamond jewellery, exclusive and limited edition jewellery. The manufacturing facilities of Lino, equipped with the state-ofart machine tools, are located in Yekaterinburg, where two show rooms displaying company products are situated too. On the average, the company manufactures 1.5 - 2.0 kg of finished articles per month. The company has found a lot of partners all over Russia — from Kaliningrad to Vladivostok — during its operations on the market.
YUVEROS The company has been operating on the market for twelve years. Most of the company’s products are mass-produced articles made from gold with diamonds and coloured gemstones. A new area the company is developing is silver jewellery. Earlier it was silverware, now it is mostly jewellery. Yuveros possesses its own production facilities. As of now, there are two company’s shops: in Podolsk (the Moscow region) and in Moscow. The company is going to open another three shops in Moscow. Yuveros collaborates almost with all the regions of Russia and with some partners in Turkey and Thailand. RUSSIAN DIAMONDS & JEWE L L E R Y
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REPORT
E XPO
The Much Expected Exhibition Since 2011, the Crocus Expo, Moscow’s largest and state-of-the-art trade fair and business centre, has been house to Russian jewellery fairs. Yuvelir-Fest launched the Crocus Jeweler exhibition programme together with the Jewellers’ Guild of Russia, regional professional associations as well as jewellers’ associations of the CIS countries. The May and September exhibitions are of interest to the foreign companies that already operate or are going to operate on the Russian market. The other jewellery market participants are attracted by comfortable working conditions and unprecedentedly low prices for Moscow.
T
he major Moscow expositions have moved to the Crocus Expo during the last eighteen months. The exhibition complex with a total area of 500,000 square meters located in the North-West district of the Russian capital gains in popularity with each exhibition held there. The Crocus Expo’s infrastructure is of great relevance too: the Aquarium Hotel located in Pavilion 3 to be commissioned in 2011, two more high-rise hotels; underground and multi-level car parks for 40,000 vehicles; the metro railway station located on the premises of the complex with exits to Pavilion 2 and 3. It takes some thirty minutes to reach Crocus from Moscow centre by metro railway. The same period of time will be needed to get to Crocus from Sheremetyevo Airport, and a little longer from Domodedovo Airport. Crocus is not only a trade fair centre but also a huge shopping mall (Crocus City Mall) and the most spacious Moscow concert hall named after Muslim Magomayev. All these facts added together attract a lot of visitors, wholesalers and retailers. The comfortable working conditions and longterm stability, which no other Moscow site can offer today, are in the foreground now. All Crocus Expo’s projects have been planned for long periods; therefore they are based on loyalty to their partners. For example, Yuvelir-Fest rented their exhibition space on the condition that the prices would not perk up within five years. Accordingly, the exhibitors of the Crocus Jeweler ‘s programme used to pay $200 per one square metre of the raw space, i.e. two times less than similar Moscow exhibition centres would demand. The prices will not change either for those who participated in two or more Crocus-Yuvelir-2011 fairs within five years. Amid the crisis and sales slowdown, the high Moscow exhibition prices became simply impracticable for
The General Director of Jewellers’ Guild of Russia VLADIMIR MOSPAN gets familiarised at Crocus Jeweler with the products of Krastsvetmet factory, one of the leading Russian jewellery manufacturers.
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RE PO R T
E XPO
JEWELLERS AT CROCUS EXPO Within 2006-2010, autumn exhibitions Golden Globe were held at Crocus Expo. On 11 - 14 November 2010, the Golden Globe/Moscow Jewellery International was held; it was the 5th edition but the first time for Yuvelir-Fest. Over 80 jewellery and timepiece making companies from Russia, Belarus, Azerbaijan, Kirgizstan and Switzerland took part in it. At the Golden Globe, the customers’ interest was attracted both by traditionally high-quality brands such as Krasnoselsky Yuvelirprom, Moscow Special Alloys Plant, Maskom, Sakha Yuvelir, and by the ultra-modern designs elaborated by Lino Russian Platinum Company, Agni, Goldberry and Casting House. At this exhibition, the winners of the second Russian jewellery Golden Boat contest received their awards; and one of the winners Ilgiz Fazulzyanov, for his Bullfinches pendant, received the Grand Prix at the International Jewellery Design Excellence Award 2011, whose balance was struck on 4 March in Hong-Kong. The contest most prestigious on the jewellery market of Russia and CIS countries will further be held within the Crocus Jeweler’s exhibition programme. Just prior to 8 March, a pre-holiday jewellery fair traditional for the Russian jewellery market was held at Crokus Expo. It was accompanied by a large influx of prospective end consumers and enhanced sales. Purchases at $15-20t were not rare because wealthy people normally go shopping to Crokus. Thus, the products of Crokus-Yuvelir’s foreign exhibitors can be seen both by trade representatives from all Russian regions and by multiple end consumers. The advantages of the new programme, such as low prices ($200 per one square metre) were enhanced by an opportunity to construct exclusive stands two times cheaper due to the use of new Advantec sets available only at Crokus Expo.
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jewellery manufacturers, who have the highest spendings. It may well be known that starting from 2009; Moscow exhibition spaces do not yield any financial gain to the majority of the exhibitors from their retail sales or relative to the number of their signed wholesale contracts. The democratic provisions of the Crocus Jeweler ‘s programme give wide opportunities to Russian regional and foreign companies to enter the Moscow market and, consequently, the all-Russia market as well. The Crocus Jeweler organisers are trying to re-establish the status of a normal market segment for the companies where prices and margin must be correlated to the general situation. As the information on the new trade fair projects spread about, it was supported by the leaders of the jewellery market from Moscow, Saint Petersburg and Kostroma. The foreign companies are interested in the spring (21-24 May) and autumn (14-18 September) fairs to be held under the new programme. In May, several dozen companies from Thailand are expected to come. They developed a new brand, Ploi Thai, in that country last year, which means ‘Thai valuables,’ and accepted its promotion programme on the national level. Therefore, visitors to the May Crocus Jeweler will get to know not only stones of the renowned Thai cut and Thai silver articles but also the Thai national songs, dances and specialities of the Thai cuisine. This fair except the brand zone will include the collective stands of Saint Petersburg, Kostroma, Yakutia (Sakha Republic), Ukraine as well as Hong-Kong and Turkey jewellers. As advised by a number of big Russian companies, the autumn fair has been planned for 14-18 September, 2011. However, afterwards they are going to move it to the first half of October. It would be more convenient for all because September is crowded with shows and fairs both in Europe and in Asia, and they are visited by many experts of Russian manufacturing and trading jewellery companies. RUSSIAN DIAMONDS & JEWE L L E R Y
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TRENDS
DE SIGN
PENDANT PENDA JUVELIA (Russia, Saint Perersburg)
Nowadays, ad the modern jewellery art keeps up with tthe times as it never did before, displaying a general en tendency to return to less complicated shapes ap and materials. Expecting p pe BASELWORLD 2011, the jewellers prepared e ep collections that will determine major trends e in design such as Champagne Bubbles, Graffiti, Chocolate, etc. These trends are united Gr by jewellers’ aspiration to focus not only on colour, shape, volume and function, but also c rreturn to symbolic and conceptual aspects of jjewellery design. A relationship between jewellery and the core values of modern society is expressed in major trends of the coming year.
By Irina Slesareva PENDANTS SUPERORO
GR
FFITI PENDANT GIORGIO VISCONTI
The letters and monograms do not perform only a decorative function. Embellishments containing text messages is another modern subculture component and is one of the paths to self-identification. The jewellers adorn rings and pendants with pictures, confessions and messages made from gemstones applying various methods of surface treatment and text application.
RINGS BLUE WHITE GROUP
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TR NEN WDSS PENDANT LOWELL GROUP
MARKE DE SIGNT
PENDANTS TIFFANY & CO PENDANT PENDA GOLDBERRY (Russia, Kostroma)
EARRINGS BROSWAY
RINGS ORIANNE COLLINS
BRACELET BROSWAY
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